College aid: Think like a shopper when seeking financial help

If you've lost your job or watched your college savings vanish, you may be among the countless people lying awake at night, wondering how to say "yes" to college for next fall.

Many families are stunned by annual costs of $20,000 or more cited in the acceptance letters students have received recently.

But what families have to pay is not set in stone. Parents and students can make college more affordable if they think of themselves as shoppers, rather than college applicants. They can ask for financial help from colleges that have offered little or none. And they can cobble together financial aid from colleges, tuition payment plans and student loans that won't need to be paid off for 10 years or more.

Virtually anyone can afford to go to college if they shop. In fact, the more desperate your situation, the more likely you are to receive help if you hunt for aid.

"Just don't let your child fall in love with a particular school," said Kalman Chany, a financial aid consultant and author of "Paying for College without Going Broke."

Here's what to do:

Remember colleges are nervousAs you look for financial aid, realize that your income and savings factor heavily into the offer you receive, but that offers will differ. Chany said they vary more this year than he has seen during years of financial aid consulting. In one case, a student's offers ranged from $17,000 to $32,000. "Private colleges are very concerned about the ability of people to afford college," said Jim Scannell, president of Scannell & Kurz, Inc., a firm that helps colleges with enrollment. Consequently, they are afraid students will back out at the last minute and spots won't be filled. They are planning to provide more money for tuition discounts.Scannell said that if money is an issue, students can apply even now to small private colleges they may not have considered. He expects that seats in lesser-known colleges will be opening up.

See whether it's a good valueAs families search for aid, they must be careful about comparing information, said Joyce Smith, executive director of the National Association for College Admission Counseling. Because colleges are worried about filling classes, some are accepting more students than they can accommodate. As a result, a student might end up having to pay for housing off campus, or a study-abroad program without financial aid. For students seeking jobs in a difficult economy, college job-placement offices might be critical, and some provide little help.

Update your situationIf you lost your job late last year, don't assume that the college financial aid office has considered your plight. When colleges offer students financial help, they typically base the aid offer on student and parent financial conditions from the previous year. So if, for example, you lost your job in November and are still looking for work, your income looks higher on paper than it is now. Go back to the financial aid directors at colleges and tell them about your new financial condition. Ask about Pell grants, and other grants that don't have to be repaid, plus Perkins loans for lower-income students. The Department of Education just sent a letter to financial aid offices recently telling them they can base federal grants—such as Pell grants—on a person's current and likely employment over 12 months instead of the past.

Delays could work against youSometimes when parents lose jobs, they think their child should work for a year and then go to college. Chany said that could be the worst move, reducing financial aid by thousands of dollars. Under financial aid formulas, student income is supposed to be routed to college, while most income from parents is expected to go for broad family needs. The result, Chany said, is that if a student worked for a year and made $10,000, the family's financial aid the next year could be cut by about $4,000. Instead of working, Chany suggests looking for financial aid first. Many financial planners suggest students consider attending community colleges for the first two years of college and then transferring to schools that will provide a diploma with more cachet. But it's expected to be more difficult to get into some community colleges as more students go there to reduce costs.